Not against any individual, it's about contractual obligations: Wipro on lawsuits against former top executives

In November, Wipro filed a lawsuit against former chief financial officer (CFO) Jatin Dalal accusing him of violating the non-compete clause in his employment contract

IT services firm Wipro on January 12 said there's nothing personal or targeted in the way the company is dealing with contractual obligations, referring to the lawsuits the company has filed against its former chief financial officer Jatin Dalal and senior vice-president Mohd Haque.

"We are sticking to business practice, we've been in this business for 30 years," Thierry Delaporte, CEO of Wipro, said while addressing the media after declaring the December quarter results. "I know how this is working and we only apply those normal terms and we are committed to our employees, we expect the same from them."

In November, Wipro filed a lawsuit against former chief financial officer (CFO) Jatin Dalal. It was referred to arbitration by the Bengaluru City Civil Court in a hearing on January 3. Wipro had sued Dalal accusing him of violating the non-compete clause in his employment contract by joining rival Cognizant within 12 months from his last date of work. In a countermove, Dalal in his application had requested the court to refer the matter to arbitration.

"We realize that when you are bringing talent, we have been also promoting a lot of talent, it triggers a little bit of a churn and this you must be prepared for that," Delaporte said. "If you are... transforming the organisation... and if you're providing as much talent in the organisation as we've done over the last two to three years, you have to be prepared for the fact that some people will decide to go."

He further said the company is not destabilised by these decisions because "we have the pipeline".

Delaporte said there is absolutely "nothing unusual" in the way the company has dealt with "every case" of over the last few quarters. He then went on to say the company accepts that there's nothing wrong with employees quitting organisations.

"There are legal obligations that need to be fulfilled, and it's not specific to Wipro, it's the same everywhere in the industry," Delaporte said.

Referring to Wipro’s new CFO Aparna C Iyer, CEO Delaporte said the most promising talent in the finance function at this point has taken over the CFO role about a quarter ago. “And she's doing fantastic, that is the power of talent that we have built over the years” he added.

Wipro has lost over 10 of its top-level executives in a short period along with several others below them to different companies. However, only former CFO Jatin Dalal and senior vice-president Mohd Haque, both of whom joined rival Cognizant, ended up getting sued by the IT services giant for breaching non-compete clauses in their employment contracts.

This comes at a time when other key leaders like former chief operating officer (COO) Sanjeev Singh and former iDEAS business head Rajan Kohli also joined rival firms such as CMS IT Services and CitiusTech, respectively, in CEO positions.

The company has a fixed list of 10 major IT companies that are competitors that senior executives cannot join within 12 months of them serving their last day at Wipro. These firms are Accenture, Capgemini, Cognizant, Deloitte, DXC (formerly HP), HCLTech, IBM, Infosys, Tata Consultancy Services (TCS) and Tech Mahindra.

Dalal, during his tenure, was one of the core decision-makers and signatories on the company’s acquisitions, strategies and large deal negotiations of $100 million and above. He was also on the investment committee of the $300-million strategic fund of Wipro Ventures, which invests in early- and mid-staged startups.

His last date of work was on November 30, 2023.

Apart from suing Dalal for breaching the non-compete clause, Wipro is also seeking Rs 25.15 crore in damages from him, along with 18 percent interest per annum until the time of full payment.

Wipro also sued its former SVP and head of healthcare and medical devices for the Americas, Mohd Haque, who also joined Cognizant recently. Haque is facing accusations of possessing seven files containing confidential information, which were sent from his personal Gmail account and flagged by Wipro’s IT team along with violating his non-compete clause.

Most recently, Wipro’s chief growth officer Stephanie Trautman stepped down as the company is restructuring its growth organisation by integrating the Strategic Pursuits team, formerly under the CGO, into Strategic Market Units.

Wipro on January 12 reported a 12 percent year-on-year (YoY) fall in net profit at Rs 2,694 crore for the third quarter of the current financial year. This profit is in line with Moneycontrol’s poll estimates of Rs 2,706 crore.

Also read: Wipro ends Q3 with 4,473 fewer employees, headcount drops fifth quarter in a row

This is the fourth consecutive quarter wherein the company has reported a fall in profits YoY. Consolidated revenue came in at Rs 22,205 crore, down 4.4 percent YoY, below analyst estimates of Rs 22,343 crore.

The company won large deals worth $0.9 billion during the quarter, lower than the $1.28 billion it won in the last quarter. Total deal wins stood at $3.8 billion, which is similar to what the company had recorded in the September quarter.